Econ 104 11th Edition Lecture 3 Outline of Last Lecture I Big Problems Recession and Inflation II Government Deficits III National Income Accounting IV Real GDP and Nominal GDP Outline of Current Lecture I GDP II Underground Economy III Nominal GDP IV Real GDP Current Lecture 1 GDP a GDP The total market value of all final goods and services produced in a given time period i Example A Car The dealership buys tires from Firestone The cost of the tires and labor are then factored into the final price of the car ii GDP is looked at in the terms of Quarterly or Yearly data for a given time period 2 Underground Economy a Underground Economy The part of a country s economy that is untaxed by the government i 2 3 of the unreported income comes from legitimate sources 3 Nominal GDP Measured in current prices for a given time period year or month a Example GDP 1980 P 1980 x Q 1980 1980 represents the Year 4 Real GDP The whole market value of final produced priced goods and services which are measured in constant prices a Example GDP 1980 GDP 2013 5 Example Nominal and Real GDP GDP Population Per Capital GDP 1933 56 Billion 126 Million 1990 5 600 Billion 250 Million 444 22 400 Prices have increased by 800 since 1933 in the US but NOT for everything These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute Real GDP 1990 Nominal GDP 1990 1990 Price Level 1933 Price Level 5600 Billion Divided 900 100 Nine Hundred over One Hundred 5600 9 622 Billion The Real GDP in 1990 based on 1933 Prices For Per Capita GDP 22 400 Divided 900 100 Nine Hundred over One Hundred 2 488 Real Per Capita Based on 1990 and 1993 Prices
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